Question

Operating Cost ₹ 3,40,000; Gross Profit Ratio 20%; Operating Expenses ₹ 20,000. Calculate Operating Profit Ratio.

Answer 1

Cost of Revenue from Operations

=Operating Cost−Operating Expenses 

=3,40,000 - 20,000 = Rs 3,20,000 

Gross Profit =`(320000 xx 20)/80`= Rs 80000

Revenue from Operations=Cost of Revenue from Operations + Gross Profit                                        

=3,20,000 + 80,000 =Rs 4,00,000 

Operating Profit=Revenue from Operations - Operating Cost 

=4,00,000 − 3,40,000 =Rs 60,000 

Operating Profit Ratio = `"Operating Profit"/"Revenue from Operations" xx 100`

`= 60000 / 400000 xx 100 = 15 %`